KABUL: Afghan Money Exchangers Union said in a report that two and five Afghani coins have lost their value on account of inflation, which has in turn given rise to smuggling of currency outside the country.
A member of Afghan Money Exchangers Union, Abdul Majeed Ahmadzada, said that “Our coins are smuggled from Afghanistan, because their metal weight is valuable.”
Inflation has caused the real value of AFN coins to exceed their market value, the relative worth of the coins metal in comparison to their weakening purchase power has prompted a smuggling exodus.
Although Central Bank of Afghanistan does not provide information regarding the specific number of coins in circulation, it has reported that the demand for and supply of the coins have declined. “They have been sufficiently produced, and we have enough coins, but, in truth, demand is low,” Central Bank acting governor Khan Afzal Hadawal told TOLOnews.
Independent analysts appear more concerned than Central Bank officials. “These coins have lost their market values, so you cannot purchase something with one or two Afghanis; that is why these are not the real values of the money,” said Said Masood, an Economics Faculty Professor at Kabul University.
In order for coinage to function the way it is intended, it must have a market value higher than its original value, or the value of the metal used in making it. Otherwise, they can become lost in the market and repurposed illegally for industrial purposes.
